Economic Goods, Services & Utility

1. Economic Goods, Services & Utility Marketing Principles Chapter 1

2. General Purposes of Marketing • People have economic needs & wants • Producers create goods & services to satisfy consumer’s needs & wants • Marketing adds usefulness to goods & services by bringing sellers(producers) & buyers(consumers) together so exchange can occur.

3. Economic Goods & Services • Things produced that satisfy consumer’s needs & wants • Goods: Tangible (can touch) • Services: Intangible (can not touch)

4. Before Exchange Can Occur Goods & Services Need Utility Utility(usefulness): The attributes of a product or service that make it capable of satisfying consumers’ wants & needs.

5. Utility is added through Marketing & the 7 Marketing Functions • Distribution • Financing • Marketing-Information-Management • Pricing • Product/Service Management • Promotion • Selling

6. Goods & Services Must Have Utility(usefulness) – 5 Ways Utility is Added to Goods & Services • Form • Place • Time • Possession • Information

7. Economic Utilities 1. Form Utility Changing raw materials or putting parts together to make them useful to consumers. • Example: A tree is not useful to consumers until it is cut down and produced into a good like a chair or desk. Putting raw materials together so it satisfies consumers’ needs adds form utility.

8. Economic Utilities 2. Place Utility • Adding usefulness by having a product where customers can buy it. • Example: Selling winter coats in Alaska. Winter coats would not have utility in Florida. • Example: Selling products at stores that are located in cities where populations are large.

9. Economic Utilities 3. Time Utility • Adding usefulness by having a product available when it is convenient & needed by customers. • Example: Retailers offer large supplies of backpacks in the late summer, near the beginning of the school year. • Example: Selling candy @ Valentines

10. Economic Utilities 4. Possession Utility • Adding usefulness by helping consumers take ownership of products. • Example: Taking credit cards and checks rather than just cash enables customers to buy products. • Offering 0% free financing. • Offering free delivery with purchase of a product.

11. Economic Utilities 5. Information Utility Adding usefulness to goods & services by providing information so the customer is comfortable buying. • Example: Salespeople explain features of products. • Example: Packaging explains qualities and uses. • Example: Advertising informs consumers about products.

12. Goods & Services Must have Utility All types of utility are added throughout the marketing process so products have value to consumers.